We aren't hearing much about this act expiring in December. http://www.irs.gov/Individuals/The-Mortgage-Forgiveness-Debt-Relief-Act-and-Debt-Cancellation-
If it is not renewed - what is the incentive for people to follow through with a short sale? When the sellers are taxed on the debt forgiveness, that can mean paying tens of thousands of dollars in income tax. Kind of like kicking someone when they are already down!
For the most part, sellers who are coming out ahead when they sell are not being taxed on their gains....
Also, if short sales come to a screeching halt, will that mean that banks are going to wind up with more inventory as folks fall into foreclosure...? Will that affect the strength of the banks again as they will have so much inventory on their books?
When I was in D.C. last spring, our legislatures were looking at this act just as a benefit for a few people. It appeared they did not know how this could ultimately affect the foreclosure rate.
Thoughts?
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This is off of Chase's website:
How long will the government HAFA program be offered?
This program will accept eligible borrowers until December 31, 2013.
They will accept until Dec 31, does that mean that as long as you apply before then, you are eligible for the relocation money?
They are replacing HAFA with the new GSE guidelines. Basically the same thing....
www.ssprocessors.com
Do you know if the GSE guidelines include relocation assistance?
Just in case that it does not get extended, I also heard a rumor that the higher up people are trying to fight the fact that "Taking Action" before the year ends will still qualify you for this Relief instead of having to "Complete the Sale" before the year ends, anyone heard of such thing?
I heard that it basically has been extended but won't get formally signed off by congress until AFTER the election....
but OF COURSE!!! duh.... they want to keep everyone in limbo til the last second....
imagine if this DID NOT extend???? hmmmm
This conversation went off the rails several pages ago. The Mortgage Debt Relief Act of 2007 has NOTHING TO DO WITH DEFICIENCY. It has to do with TAX LIABILITY to the seller.
lol Joe - I needed a pick me up giggle...ty :)
My 2 cents - None of us has a crystal ball. The Act is set to expire. Most of the public is unaware of the ramifications.
It is our job to explain the huge potential tax hit.
I have read many comments to this post that suggest that the clients do not have money are are not afraid of a foreclosure judgment or deficiency judgment. Folks, realize that the judgment lasts for 20 years...the credit aspect may be about 7 years. Can clients really say that they do not care?? They may not care now buyt they might later and sometimes it takes a little extra to avoid future headaches.
For example, I just negotiated a payoff to Green Tree that was for 8% - $8700. Ok, fair enough. It was the maximum that the 1st would have anyway. But for an extra $4700, I negotiated the total satisfaction...not just release. I asked the investor buyer and we put it on the HUD as a fee to me and I will pay it (in this manner the 1st's approval is not violated).
Paddy Deighan J.D. Ph.D
http://www.homesavers.pro
Paddy,
In your example you state Green tree was the first and was only permitted to receive *8%. Did you mean to say Green tree was the second? If Green tree was the first, can you explain why they were only permitted 8% and where the 8% was dictated from? HAFA is 6%. Is the 8% what was left after the first was paid off? If there is a way for me to get over the 6% I would live to learn about it.
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